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Bulls and Bears

News/Business. The latest market news; the week ahead on Wall Street. (CC)

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Todd 4, Gary B 3, Steve 3, U.s. 2, Israel 1, Elec 1, Coca-cola 1, Northern Africa 1, The Semsy 1, Tunisia 1, Qualcomm 1, Syria 1, Pepsi 1, Exxon 1, The Economy Somewhere Near 1, United States 1, America 1, Lehman Brothers 1, Europe 1, United States Defense 1,
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  FOX Business    Bulls and Bears    News/Business. The latest market  
   news; the week ahead on Wall Street. (CC)  

    September 16, 2012
    1:00 - 1:30am EDT  

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for watching. good night. [applause]trong we are. >> here is to "fox & friends." ♪ >> violence, anti-american riots and oil rich regions of the middle east, of northern africa, fueling fears gas prices could spike higher in the the u.s., they're already at record highs for this time of the year. so, just how bad could this get for drivers and for our economy? hi, everyone, i'm brenda buttner, this is bulls and bears and here they are the bulls and bears this week. gary b smith. tobin smith, jonas max ferris along with todd and steve
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murphy. okay, todd, we saw gas prices jump during the arab spring last year. how bad is this going to get. >> it's going to get horrible. first of all like you said at the top. we're at a record high this time of the year and start talking about the violence that's taking place in libya and oil based countries right now and you have to only assume at that this is going to spread. this is going to continue to move higher and this is something the u.s. economy cannot afford right now because they're looking at higher prices at the pump. less money to go out and spend. >> brenda: steve, we are seeing that supply could drive this higher, but demand might bring it down. the economy is in trouble around the world. >> yes, absolutely. first of all, the supply has not been disrupted and it's not likely to be disrupted and the gulf states, saudi arabia, especially, em rats are pumpi-- emirates wants us to stand up to iran. and the oil supplies--
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we know what the trend line is, it's going to go down in the fall and it's not the biggest threat to our economy, it's the softening demand and the down turn in europe and emerging economies. >> brenda: toby, do you agree? >> well, i do on two points. one is, obviously, we know from six months ago that the cure for a high gasoline prices or oil prices is high oil prices. we're on a-- this part where the fundamentals have separated from fear. there is no question there's a higher fear premium, but i sort of ask americans and people around the world to look at this and you know, with the context of don't let these guys scare you. i mean, yes, it's fearful, this film we're seeing is fearful, but the fact is that a, we are in a slower economy and using 6 1/2% less oil and gasoline this time this year than we did two years ago and i wouldn't change my behavior and i wouldn't worry in the threat about our economy falling off the cliff because this is a cycle and these guys are going to be out of bombs
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and bullets in about the next four or five days. >> brenda: but gary b, this erupted and no telling how it could go. >> there are two issues, toby pointed out that the gas prices are primarily, for the short-term, driven by emotions, and that's the futures, that's what you see. you saw during the arab spring gas prices rose almost 30%. but, the other point is the supply and demand and as steve points out it's not disrupted right now in the emirates and saudi arabia, but here is the problem. you remember back to the beginning of the financial crisis, i know i for one thought oh, it will just been limited to just a few banks and, sure, it steam rolled until it hit the financial sector. that's the concern here and i think what todd is alluding to. sure, if it's just contained to, you know the yemens of the world, yes, that won't be an i am tactful-- impact on the supply and
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demand. if it spreads, this is the viral thing that could spread, then we will have problems. >> brenda: jonas, that's the question, what if this spreads? >> well, most of the world's gettable reserves are in and around people that do not take much reason to get into a huge anti-american craze. it always could happen and always been like that and probably getting worse, but the bottom line is that these countries have no real economies, but selling oil. and they want to get that oil on the market. and these countries are largely run by kingdoms and dictators that's the best way to get 0 oil out of the country, people who don't like americans and throw them in prison and crazy stuff and used to do. and unless the governments are overthrown, i don't see a risk of major oil infrastructure not hitting the market essentially. that is a possibility. >> could not be more right. let's not forget in many of the countries the oil numbers are not hitting the point, you know, not near the point.
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we have excess oil. 300 days of excess oil in storage. i think we're jumping the gun here, guys. >> brenda: are we jumping the gun or they're pulling the trigger, todd. >> let me tell you, you guys are so naive to think it's a couple of days of unrest. jonas talk about governments be overthrown, they have been and democracy issues that are not taking place here. here you talk about oil rich countries, how are they going to get it out to the marketplace. look, i've got to tell you something in a twisted kind of way it's an enviable business model. you have the oil rich countries and they raise the tensions and they increases oil revenues for the country. i don't see the unrest stopping soon, it's going to carry over. >> todd, i don't know where you've got the crystal ball. we are looking at the lunatic fringe. >> i'm sorry, people have been murdered and--
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>> i understand that and that's why i call it lunatic fringe. jonas made the best point of all. this is letting off steam and ideology craziness, but going after the oil you wouldn't see a hail of bullets since d-day. >> these people are against america at this point, at the semsy. we were long ago kicked out of the country like-- there's no exxon plant even though we work with the country the bottom line the government's confiscated the oil production in iran and et cetera. and people would have to turn against their own government to go out to the oil infrastructure. and it's not like blow up the exxon refinery in iran it was taken over already, that's the bottom line and it has to get worse to force the government-- >> jonas, tunisia it started small and start thinking of other big countries. iran is a big threat right now and if this carries over with syria, israel, iran, can you imagine gas prices at that point they will be double where they are right now. >> gary b? >> well, you know, toby is
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talking about a crystal ball. i don't think the crystal ball is any clearer or the side of what jonas and toby are saying, well, you know, this is just a small thing, it's lasting a couple of days. you know, right now we have flareups in the middle east and you've got to think, wow could this continue? we've got some flareups, could this continue. the i would say the odds are, it's going it continue rather than just flow over. >> and, but, yes, i understand that, but you have to take the events as they are now and saying is this going to die off? well, maybe, maybe not. and that's all i'm saying. could it continue? yes, if it does continue, we've seen the spike in the volatility in the oil futures right now. and that keeps going up. and gas prices are going to go up. >> last time we saw the arab spring, but the other history. we were actually importing in the united states, 16, 17 million barrels of oil and we're down to 9 million barrels and we now actually export petroleum and you know, diesel fuel and other things to other countries. we're not in the same position
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and i don't think it's analogous to take this and extrapolate this over 18 months of the arab spring. >> all i'm saying, you just can't say the threat level is zero. it has to be something. that's why we've seen the spike in the last few days this past week in oil prices. >> and todd, it's not necessarily what the protesters want, is to give the government more revenue. >> you know, you've got that right. and i don't think that's smart, but look, the anti-american sentiment is right there. they hate us, always hated us and this is going to move forward. the gas prices are going through the roof as it is, guys, we're already at record high level right now. you can talk about supply and demand all the you want. once you start cutting off the supply, guys, eventually the numbers crisscross and gas prices are moving higher. >> brenda: that's got to be the the last word. thanks for everybody. while american haters are doing this, we're sending them billions of american tax dollars. time to turn off the spigot? neil's gang debates it.
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you decide. that's at the bottom of the hour. up near first, lehman brothers collapsing four years ago today, triggering the money meltdown. now, someone here says something big ben just did is
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all the breaking news, now back to bulls and bears, stay with us. >> brenda: i unhappy anniversary four years ago today. house of cards fallen in,
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pushing for the biggest bailout in our financial history. and fast forward today and fed chief ben bernanke pushing through a new stimulus rescue plan and toby says he's set us up for the next financial crisis, how so. >> neil: i don't know how to predict, but you take a look at the amount of cash, not just 45 million cash he talked about. this is an unlimited number, unlimited number until we see an effective movement in the economy, which is jobs, let's call that 7%, for us to get there, he would have to put into the economy somewhere near 2 1/2 additional trillion dollars to the 11 or 12 that we put it. that means not only inflation, dollar goes down, oil prices go up because of that. a lot of other issues, commodities, et cetera, and that's a disaster that is hitting us. it's not going to happen in three weeks, three months, but it's absolutely down the road because these guys, no one is going to quick stopping and no one is going to quick pumping
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until we blow up. >> brenda: you know what, todd, no one is doing anything. is ben the only one that can do, the fed is the only one. >> let's applaud, give a round of applauses only guy is proactive in washington and everybody else is reactive. and toby is right. we are a definitely going to be in dire straits down the road. got to tell you something, had big ben not pulled the trigger on this further accommodation, it'd be happening sooner because look, this economy was currently headed into a recession, an and if it's not already there and we are drowning in quick sand and he had to do something. >> gary b. wall street sure seems to like it. >> who wouldn't? >> absolutely, brenda, if you're in the stock market, you're happy right now, but wall street is the only one that should be liking this, look, what is the fed doing? it's printing money to lower interest rates and that's the bottom line. what, first of all, we're going to get inflation because the money is being printed and it's not like the fed has unlimited funds out there,
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that it just has on its own. second of all, let's say it does lower the interest rates and people then are have an incentive to buy houses they can't afford, we just had this scenario, people buyings house, so we have a-- an overinflated housing market that is, it's ripe for another bust. so you say set us up for another fiscal crisis, toby has it exactly right. we want to the same old thing again and this time we expect, oh, maybe it will work, because the fed is it a lot smarter in central planning. >> brenda: that's a pretty good, pretty good point. jonas, when in the past has this really worked. wall street has gone up and pulled back a bit and when has this worked. >> first of all, the fed is smarter than the white house or congress, that's a fact i'm pretty sure and-- >> well, where is the bar there? >> second of all, i have to agree with todd here, we only have this qe version because the white house and congress can't do anything else at all to do anything to the economy, to lower the unemployment rate, to get the job market,
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the job market going, to get things-- so what what they're doing, mortgage securities to buy a lower price and home prices are low now, it's a bubble on homes, the only stimulus we have, and if they can create money out of thin air and lower interest rates nor mortgages and why not, more power to them f it cases inflation, we can see the dire problems and inflate the home prices, that's great, too. >> brenda: there goes that deficit and the debt, steve, what do you think of that? >> no, i think, first of all, it worked last year and then they stopped doing it and the economy slowed down last year. >> brenda: wait a minute, unemployment above 8% still? >> the economy was growing far greater last year at this point in time than it is this year. >> and commodity prices-- >> this fed changed the policy of course they should be doing it. and there's no danger of inflation. >> he's right.
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>> the economy has a tremendous amount of excess capacity right now. with the unemployment where it is, there's no chance of inflation anytime soon. >> steve, steeve, i've been on your side of it for a while because of the excess capacity. and jump the shark when we said we're going to have unlimited supply of new cash coming in, number two, we're going to go until job rates come down to 6 or 7% and we've never had any, and this is monetary poly, guys, we're not doing anything and nobody is searching jobs and because interest. >> stocks love it and bonds hate it, so we're going to get this sugar and then we're going to run out of juice, man. >> brenda: a good way, i'm sorry i've got to end on sugar and juice, there we go. thanks, guys. all right, that fiscal cliff be damned. lawmakers will be bolting d.c. next week and won't be coming back until after the elec
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>> just one more week before lawmakers take off to campaign for the election and still no fix for the the fiscal cliff. and jonas says, great, take the rest of the year off and let the fiscal cliff hit. how come? >> i'm like the fiscal cliff's only supporter. the government has to stop, and balance the budget and the closest we are going to come to doing that with the current government that we have. we need to cut stuff and not that big, a few percent to
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medicare and i don't think one over 10% and they need. defense is not holy we need to cut that and we need tax increases because they're not going to cut enough. the payroll tax expires, that stinks. it's not a cliff, it's a speed bump and running the deficit next year anyway. >> brenda: jonas is it the not going to get elected to anything, but that's all right. he's talking some truth here, todd. the truth is that politicians, do they have the will to do this and maybe we should be be so scared of the debt and the deficit that we just fall over the cliff? >> listen, representative from maryland, chris van holland said in june if they didn't have the deal done before summer recess it wouldn't get done and clearly it's not. they're going to election recess and then the lame duck after the election. the thing about defense, with everything that's taking place this week, the turmoil. how can you possibly say it's okay to cut on the defense sector. >> brenda: and i've got to get to steve. you've got the debt, the deficit over here, and the fiscal cliff here, which way
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do you go? >> well, first of all, we went off the fiscal cliff 50, 60, 70 years ago. this is about opening a parachute, maybe three seconds before we hit the rocks. and i completely agree with jonas, but on defense spending, the united states defense spending is more than the rest of the world combined and that's plenty and riots in the middle east, we have to protect our embassies and obviously, in face of this kind of uprising we've got to do a better job and put more troops there, marines there, but our troops aren't going to have to do anything to do with that. >> brenda: gary b, what do you say? >> well, i agree with steve. and todd is just silly on the whole defense thing. look, we're going to double the defense spending protect at the embassy, steve has it right there. i disagree with jonas though, i'd like the fiscal cliff aspect of cutting the spending, why do we need to raise taxes, why is that? that's not going to work for crying out loud. to take money from the private
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sector and give it to the government that's already super bloated, the most bloated it's been in the la 200 years for crying out loud is ludicrous. let's do it the right way the way that reagan did and government is shrinking and grow gdp. and it. >> brenda: hold on. >> part of the problem. >> brenda: i know, hold on. we've got everybody worked up on now go to toby. >> hang on, i've got to take my ear plug out, so, i'm okay. and you can yell and scream all you want and smart enough to understand that we are going to have an extension for one year of this and come back in november after the election and magically say we haven't been able to refigure this out, so let's just wait another year, woo hoo. that's going to say that, if you want the economy slow down and oil prices to slowdown. push the fiscal cliff off and
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then into real recession. >> brenda: the calm toby who never screams and shouts. thanks, guys and thank you to steve for joining us, we appreciate it. >> my pleasure. >> brenda: so, it's the stock teaching striking teachers and their students a valuable money lesson. you don't need to go to a classroom to learn about it. >> when do we want it? roar
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>> predictions and jonas, you're on the hot seat. >> and buying papers and stuff and busting unioners with the picketing signs and need markers and white board, et cetera, et cetera, staples up 20% in a year. >> brenda: gary b, bull or bear. >> bearish, don't like that stock at all. >> brenda: what do you like, your prediction. >> i like football season, like the redskins and love pepsi goes great with everything up 20%. >> brenda: on that beverage, toby, what do you think. >> you're he such a bad legged guy, getting killed by coca-cola, come on. >> brenda: todd your prediction. >> and category killer apple hits $1,000 a share by easter. >> brenda: jonas, do you have anything bad to say about apple. >> easter, 2020. >> brenda: tobin, your he redix. >> the way you make money and propose he will, qualcomm. they go inside those and kindle and i'm going to continue to hang with them. >>nd